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Business Upturn
21-07-2025
- Automotive
- Business Upturn
Why are CEAT shares down over 6% today? Know More
By Aditya Bhagchandani Published on July 21, 2025, 09:40 IST Shares of CEAT Ltd. fell more than 6% on Monday, trading at ₹3,575, down from the previous close of ₹3,827.30, after the company reported a 28% decline in net profit for the first quarter of FY26, despite solid revenue growth. The tyre manufacturer posted a net profit of ₹112 crore for the June quarter, compared to ₹154 crore in the same period last year. The sharp drop in profit came as margins declined due to higher marketing spends, even as revenue grew. Revenue for Q1 FY26 rose 10.5% year-on-year to ₹3,529 crore, supported by strong demand in the OEM and replacement segments. EBITDA grew marginally by 1.3% to ₹387 crore, while EBITDA margin slipped to 11% from 12% in Q1 FY25. Domestic demand remained healthy with robust growth in key segments, though international business was flat amid global macroeconomic challenges. Expansion and outlook CEAT also announced a ₹450 crore capex plan to expand its Chennai plant's capacity by about 35%, particularly in the Passenger Car Utility Vehicle (PCUV) segment. The project is expected to be completed by the end of FY27. Managing Director & CEO Arnab Banerjee commented, 'We continue to grow at a strong pace driven by OEM and replacement segments. Looking ahead, we are well-positioned to benefit from premiumisation and electrification trends.' Banerjee has been reappointed for an additional two-year term starting April 2026, subject to shareholder approval. CFO Kumar Subbiah noted that despite the marketing-heavy quarter, cash flow management helped reduce gross debt by ₹100 crore during the period. The stock's sharp decline today reflects investor concerns over falling profitability and margin pressures, even as the company charts its growth plans. Ahmedabad Plane Crash Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
Business Standard
18-07-2025
- Business
- Business Standard
Ceat slips after Q1 PAT slides 27% YoY to Rs 112 cr
Ceat fell 1.67% to Rs 3,790.80 after the company's net profit declined 27.06% to Rs 112.45 crore on a 10.54% increase in revenue to Rs 3,529.41 crore in Q1 FY26 over Q1 FY25. The revenue growth was driven by a strong performance in both the OEM (Original Equipment Manufacturer) and replacement segments. The company reported profit before exceptional items and tax of Rs 159.04 crore in Q1 FY26, compared to Rs 195.41 crore recorded in the same period a year ago. The firm reported exceptional items of Rs 3.29 crore during the quarter. EBITDA for Q1 FY26 marginally declined 0.5% to Rs 386.2 crore, compared to Rs 388.2 crore in Q1 FY25. EBITDA margin reduced to 10.9% during the quarter as against 12.2% in the same quarter the previous year, primarily due to an increase in raw material (RM) costs. On the margins front, the company's operating margin reduced to 10.94% in Q1 FY26, compared with 12.16% recorded in Q1 FY25. Net profit margin declined to 3.18% in Q1 FY26 from 4.83% registered in Q1 FY25. In Q1 FY26, capital expenditure (capex) amounted to approximately Rs 231 crore. Arnab Banerjee, MD & CEO, CEAT, stated, We continue to grow at a strong pace with double-digit growth in top-line, driven by OEM and replacement segments. Looking ahead, we are well poised to ride the premiumization and electrification trend in the domestic market and renew our growth in international markets with stability in the geopolitical situation. Kumar Subbiah, CFO of CEAT, said, "Q1 saw strong growth and high-capacity utilization at all our manufacturing facilities. This growth came on the back of an increase in demand from OEM and replacement segments. As Q1 is a marketing-heavy quarter with significant marketing costs associated with IPL, operational margins saw a slight dip. Efficient cash flow management helped in gross debt coming down by Rs 100 crore during the quarter. Meanwhile, the board has approved the reappointment of Arnab Banerjee as managing director and CEO for another two-year term, starting 1 April 2026, pending shareholder approval. Additionally, CEAT announced a capital expenditure plan of around Rs 450 crore to expand its Chennai plant located at Kannanthangal, Sriperumbudur, in Kancheepuram district. The plant currently operates at 80% capacity and produces about 70 lakh tires annually. The planned expansion, expected to be completed by the end of FY27, aims to increase production capacity by roughly 35%, particularly in the Passenger Car Utility Vehicle (PCUV) segment. The investment will be financed through a combination of internal funds and debt. CEAT anticipates strong medium-term growth in the PCUV segment and plans to boost capacity to meet growing demand. CEAT, the flagship company of RPG Enterprises, is one of India's leading tire manufacturers and has a strong presence in global markets. CEAT produces more than 41 million high-performance tires, catering to various segments like 2-wheelers, passenger and utility vehicles, commercial vehicles, and off-highway vehicles.
